On May 29, 2013, the Government of Québec introduced in the Québec National Assembly a new bill to reform Québec’s Mining Act, Bill 43.
The new bill represents a major step within the framework proposed by the minority government of Premier Pauline Marois to reform the legal regime applicable to the mining industry. In fact, in early May, the government unveiled the first component of this reform, the new mining tax regime. It is expected that Bill 43 would be the next major step towards ending months of uncertainty for the Québec mining industry.
Although Bill 43 introduces a new Mining Act, it integrates many existing provisions under the current legislation. A summary of some of the major proposed modifications is provided below.
Additional Powers for Municipalities
Under the current system, mining companies are permitted to carry out their exploration, search, or development activities without interference by municipalities’ land use planning decisions. This concept finds support at section 246 of the Act Respecting Land Use Planning and Development.
Bill 43 modifies the Act Respecting Land Use Planning and Development and thereby, proposes a nuance to the prevalence of mining activities over municipal decisions by allowing municipalities to intervene in the delimitation of mining zones on their territories. Municipalities would be allowed to designate parts of their territory as “mining incompatible” or “conditionally mining compatible” in their land use and development plans. While empowering municipalities, Bill 43 reserves to the Minister of Natural Resources and Wildlife (the “Minister”) the right to revise a municipality’s designations if she is “of the opinion that it is necessary to allow mining activities” in that part of the territory. Therefore, municipalities will not have the final word with regard to mining zones on their territory.
Mine Operators’ Expropriation Powers Maintained
The government has chosen to maintain the possibility for mine operators to expropriate for the purpose of conducting mining operations. Under the proposed text, the mining company may only benefit from this right at the operation stage of the mine, and not at the exploration stage. Furthermore, Bill 43 requires the expropriating party to pay the costs of “the professional services required to negotiate” the purchase agreement between the mining company and the owner of a family residence, up to a maximum amount representing 10% of the value of the property.
Better Protection of the Environment
The planned reform, if approved, would impose a new environmental requirement on all mining projects in Quebec. The bill modifies the Regulation respecting environmental impact assessment and review in order to subject all construction and operation to an environmental evaluation.
Obligation to Provide a Financial Guarantee with the Rehabilitation and Restoration Plan
Bill 43 further requires mining companies to provide a financial guarantee along with the rehabilitation and restoration plan that they must submit prior to the start of mining activities. The financial guarantee, payable in three instalments, shall cover the anticipated cost of the work required to restore the mining site once mining activities have ceased. Such work includes:
- the rehabilitation and restoration of accumulation areas;
- geotechnical soil stabilization;
- the securing of openings and surface pillars;
- water treatment; and
- road-related work.
Enhanced Protection of the Public Interest
The proposed legislation also enhances protection of the public interest. For example, it allows the Minister to reject an application for a lease to mine surface mineral substances on public interest grounds. The Minister is also granted the power to terminate such leases on the same grounds, so long as the mining company is either granted the opportunity to lease another parcel of land or receives due compensation for the loss suffered.
Requirement for a Feasibility Study on Ore Processing in Quebec
Under the framework proposed by Bill 43, the application for a mining lease must be accompanied by a feasibility study on ore processing in Québec. Once the study is submitted, the Minister may also require the mine operator to enter an agreement “for the purposes of maximizing economic spinoffs within Québec”. Given the general wording used, the potential scope and impact of this provision remains uncertain at this point.
The proposed legal regime is expected to be more transparent with regard to the details of mining activities carried out in Québec. Mine operators would be required to make public, once a year, additional information with respect to certain matters, including information pertaining to extracted tonnage and royalties paid annually. Moreover, Bill 43 requires that any agreement between a holder of a mining lease and a community be made public.
The Next Steps for Bill 43
For the approval of the proposed legislation, the PQ minority government will need the support of at least one of the major opposition parties. From the initial reactions of most politicians, one can deduce that there is a will to approve rather than reject Bill 43.
Certain modifications would likely be brought to the bill following debates between politicians on the matter. Nonetheless, both the political community and the mining industry seem to agree that an understanding to achieve regulatory stability is needed to ensure the prosperity of the mining industry.